ARLINGTON, VIRGINIA — Boeing's Chief Executive, Dave Calhoun, has cast doubt on the potential for sustainable aviation fuels (SAFs) to reach price parity with traditional jet fuel. This has implications for the aviation sector's plans to reduce emissions using these climate-friendly biofuels.

Airlines have claimed that SAFs—produced from food waste including cooking oil and plants—can significantly reduce carbon emissions by replacing kerosene-based fuels currently used in aircraft. However, SAFs presently account for less than 1% of global aviation fuel consumption and cost at least double the price of standard jet fuel.

Boeing's CEO Calhoun asserted that while economies of scale will be achieved, the price of SAFs will never match that of traditional jet fuel. This opinion echoes the private concerns of the sector about the challenges and costs associated with decarbonising the industry, a legacy of the petroleum era.

Calhoun's candid remarks were acknowledged by Robert Campbell, head of energy transition research at Energy Aspects. He confirmed that cheap SAF production methods do not exist, adding, "if there were, we would already be using them."

The Biden administration's Inflation Reduction Act (IRA), passed last year, included substantial clean energy subsidies, including tax credits for SAF production. The European Union has also directed airports to increasingly fuel aircraft with SAFs.

In 2021, the International Air Transport Association (IATA), a trade association comprising the world's largest airlines, set a goal of achieving net zero emissions by 2050, with SAFs contributing 65% of the reduction.

However, Willie Walsh, the former CEO of British Airways and current head of IATA, warned that transitioning to net zero would not be cheap or unnoticeable. He stated that passengers will inevitably face higher fares, as airlines cannot absorb the cost.

As of last Friday, the US price of sustainable aviation fuel was $6.83 per gallon, while jet fuel cost $2.34 per gallon, as per data from Argus Media. Transitioning to 100% SAF usage would entail modifying existing fueling infrastructure, both at airports and onboard planes, to accommodate biofuels.

Boeing and Airbus have pledged to make their aircraft fully compatible with SAFs by 2030, up from 50% today. Boeing is also introducing a new modeling tool, Cascade, to help airlines and policymakers evaluate decarbonization strategies.

However, critics warn that rising demand for SAFs could deplete feedstock from food fats, thereby increasing demand for crops and potentially endangering forests or creating competition for land needed for food supply. To meet this demand, the Biden administration has proposed using agricultural waste produced alongside corn and soybeans and woody biomass from western states.

Analysts note that without guaranteed long-term demand, investors may hesitate to invest in new SAF production capacity, keeping costs high for this specialized product. Tom Vilsack, the US Secretary of Agriculture, said that IRA tax credits will aid the industry in overcoming this investment barrier, although he concurred that price parity with jet fuel won't be realized soon.